What is Unbanked?

A person is unbanked when he or she does not participate in the banking system and relies on the use of cash rather than checks or credit cards.

How Does Unbanked Work?

Let's assume John Doe is poor and does not trust banks. He cannot afford the monthly fees of a checking account, so he uses cash and cashiers' checks from a convenience store to pay his bills. John Doe could operate more efficiently with a checking account, a savings account, and maybe a debit or credit card, but he chooses not to have those things. He is unbanked.

Why Does Unbanked Matter?

The Federal Depository Insurance Corporation (FDIC) surveys the nation's underbanked and unbanked frequently. Approximately 20% of all households are either unbanked (they do not use banks at all) or underbanked (they use banks only on a limited basis).

Ask an Expert about Unbanked

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Unbanked.

Be the first to ask a question

If you have a question about Unbanked, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

Verified Content You Can Trust
verified   Certified Expertsverified   5,000+ Research Pagesverified   5+ Million Users